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Keep up to date on the latest tax and accounting news and updates to our firm.

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Please note: Some material may be time-sensitive and may no longer apply.
Please contact us with any questions.
  1. Posted on: 2021-02-02
  2. Posted on: 2021-01-05
  3. Posted on: 2020-10-06
  4. Posted on: 2020-09-01
  5. Posted on: 2020-08-04
  6. Posted on: 2020-07-01
  7. Posted on: 2020-06-02
  8. Posted on: 2020-05-05
  9. Posted on: 2020-03-31
  10. Posted on: 2020-03-03

COVID-19 Relief Bill Summary

Congress passed another COVID-19 relief on Monday evening.  Here's a brief summary of the provisions affecting individuals and businesses:

Individual Provisions

  • Direct Payments - authorized a second round of direct payments of up to $600 per individual and qualified child.  Adult dependents are not eligible for the payments.  The payments will be based on 2019 income and begin to phase out at $75,000 for single filers, $112,500 for head of household, and $150,000 for those married filing jointly with no qualifying dependents.  There are a few changes to the direct payments other than the smaller amount.  Children will be eligible for the same amount as adults, and families with members of mixed immigrant status with a valid social security number for one spouse are also eligible for the payments.
  • Unemployment Benefits - authorized an 11 week extension of unemployment benefits first provided in the CARES Act that were due to expire December 26.  This also includes the extension of unemployment benefits to workers who are traditionally ineligible such as gig economy workers and independent contractors.  This provides an additional $300 per week supplement to state unemployment benefits.
  • Child Tax Credit and Earned Income Tax Credit - made adjustments to how these credits are calculated for the 2020 tax year.  A taxpayer's 2019 income will be used to determine eligibilty for the 2020 tax year.
  • Charitable Contributions - extended the above the line charitable contribution through 2021 at $600 for those married filing jointly and $300 for other filers.  This means that taxpayers will bw able to take the standard deduction and deduct up to $600 in charitable giving.  For the 2020 tax year, taxpayers could deduct up to $300 ablove the line for charitable giving.
  • Flexible Spending Accounts - allowed these balances to be rolled from the 2020 tax year into 2021, and the 2021 balances can be rolled into 2020.  This will help individuals with unused balances such as for childcare expenses who would normally lose the value of the FSA balance at the end of the year.

Business Provisions

  • Paycheck Protection Program (PPP) - renewed funding of $284 billion for the PPP to provide forgivable loans to first and second time small business borrowers.  Second time loans are limited to businesses with fewer than 300 employees and at least a 25 percent drop in gross receipts in a 2020 quarter compared to the same quarter in 2019.  In addition, businesses taking a PPP loan will also be able to take the Employee Retention Credit when previously they were allowed to opt for one or the other.  The bill also clarfies that businesses can deduct expenses paid with forgiven PPP loans.
  • Economic Injury Disaster Loans and Small Business Debt Relief Payments - provided additional funding for new EIDL grants for businesses in low-income communities; for SBA debt relief payments; and enhancements to SBA lending.  An additional $15 billion in dedicated funding is set aside for live venues, independent movie theatres, and cultural institutions.
  • Employee Retention Tax Credit - authorized the extension and expansion of this credit through July 1, 2021.  The bill increases the refundable payroll tax credit from a maximum of $5,000 to $14,000 by changing the calculation from 50% of wages paid up to $10,000 to 70% of wages paid up to $10,000 for any quarter.  The bill also clarifies that businesses will now bw able to take the credit and participate in the PPP.
  • Deduction for Business Meals - expanded the deduction of business meals to 100% for 2021 and 2022.

 

Archive
Please note: Some material may be time-sensitive and may no longer apply.
Please contact us with any questions.
  1. Posted on: 2021-02-02
  2. Posted on: 2021-01-05
  3. Posted on: 2020-10-06
  4. Posted on: 2020-09-01
  5. Posted on: 2020-08-04
  6. Posted on: 2020-07-01
  7. Posted on: 2020-06-02
  8. Posted on: 2020-05-05
  9. Posted on: 2020-03-31
  10. Posted on: 2020-03-03